Former Trump adviser Steve Bannon hit with wire fraud, money laundering charges

Former White House adviser Steve Bannon was arrested Thursday on charges that he and three others ripped off donors to an online fundraising scheme "We Build The Wall."

The charges were contained in an indictment unsealed in Manhattan federal court that alleged Bannon received more than $1 million US himself, using some to secretly pay a co-defendant, Brian Kolfage, and to cover hundreds of thousands of dollars of Bannon's personal expenses.

Federal prosecutors alleged that Bannon and three others "orchestrated a scheme to defraud hundreds of thousands of donors" in connection with an online crowdfunding campaign that raised more than $25 million to build a wall along the southern border of the United States. 

Bannon, 66, faces one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Each charge carries a maximum penalty of 20 years in prison. 

In addition to Bannon, three others were charged with playing a role in the scheme: Kolfage, 38; Andrew Badolato, 56; and Timothy Shea, 49.

A phone at the office of Bannon's lawyer went unanswered Thursday morning. A spokesperson for Bannon did not immediately respond to a request for comment.

Bannon served as adviser to Donald Trump's administration until August 2017, almost exactly a year after he had assumed the role of Trump campaign chair.

He had risen to prominence at Breitbart.com, helping direct coverage at the conservative outlet to focus on criticizing moderate Republicans, as well as stories on crimes committed by those in the U.S. illegally.

He has been credited with helping turn around a campaign that was struggling in the polls against Hillary Clinton and employing a no-holds barred approach.

After Trump was damaged by the revelation of an Access Hollywood tape in which he bragged about sexually assaulting women, Bannon was said to have arranged a session two days later on the eve of a presidential debate in which four women reprised allegations against former president Bill Clinton of sexual assault and sexual misconduct.

Bannon, along with former senator Jeff Sessions and former Sessions aide Stephen Miller, have been described as helping formulate what would become a hardline immigration stance from the Trump administration. All three joined the administration, but only Miller remains, as an adviser.

Defendants faked invoices: indictment

According to the indictment, Bannon promised that 100 per cent of the donated money would be used for the project, but the defendants collectively used hundreds of thousands of dollars in a manner inconsistent with the organization's public representations.

The indictment said they faked invoices and created sham "vendor" arrangements, among other ways, to hide what was really happening.

"It's not possible to steal the money," Bannon's co-defendant Kolfage once said publicly, according to the indictment. "I can't touch that money. It's not for me."

We Build the Wall originally promoted a project for three miles of fence posts in South Texas that was ultimately built and largely funded by Fisher Industries, which has received about $2 billion in funding for wall contracts. Tommy Fisher, CEO, didn't respond to calls for comment.

Trump recently criticized that section of wall after it showed signs of erosion, saying it was "only done to make me look bad," even though it was built by his supporters.

After a career in the navy and in finance, Bannon rose to political prominence through Breitbart.com, especially after the 2012 death of Andrew Breitbart.

As executive editor, Bannon helped direct coverage at the conservative outlet to focus on criticizing moderate Republicans, doing deep dives on Democratic scandals like the Anthony Weiner sexting case, and stories on crimes committed by those in the U.S. illegally.

For a time, Trump continued to praise Bannon after he left the White House, but soon grew angered by the ex-adviser's willingness to talk to reporters about the first six months of the administration.

Multiple reports alleged that Trump was irked by Bannon's appearance on a Time Magazine cover in the first days of the administration, which included the tagline "The Great Manipulator."

Bannon returned to Breitbart for a time but more recently has focused on efforts to establish a Catholic academy with a political orientation at an 800-year-old monastery in Italy.

Bannon is the second former Trump campaign chair to be charged criminally. Bannon as campaign chair succeeded Paul Manafort, who is currently serving a sentence for an assortment of bank fraud and witness tampering charges in home confinement due to COVID-19.

The final report from the Republican-led Senate intelligence panel released this week laid out a series of extensive contacts between Manafort and at least two men close to the Kremlin.

Manafort has been accused of sharing polling data with one of the men, and lying to both the FBI and investigators from special counsel Robert Mueller's team.

NBC News, the Los Angeles Times and the Washington Post each reported this week that Bannon was among a small number of individuals recommended by the Senate panel for a criminal referral for potentially misleading special counsel investigators.

It is not clear if that referral was ever followed up on by federal investigators.